What type of insurance is similar to term life insurance but includes cash value accumulation?

The type of insurance that is similar to term life insurance but includes cash value accumulation is whole life insurance. Whole life insurance is designed to provide lifelong coverage, which is a key distinction from term life. It not only offers a death benefit to beneficiaries but also includes a savings component that accumulates cash value over time.

This cash value grows at a guaranteed rate and can be accessed by the policyholder during their lifetime through loans or withdrawals, providing a level of financial flexibility. The premiums for whole life insurance are typically higher than those for term life, but this is to account for both the lifelong coverage and the cash value component.

Endowment life insurance is typically structured to pay out a benefit either upon death or after a specified period, which is different from the ongoing coverage offered by whole life. Variable life insurance, while it does accumulate cash value, ties that cash value to investment performance, making it more variable in terms of returns compared to whole life’s guaranteed cash value growth. Term life insurance, on the other hand, does not include any cash value; it simply provides coverage for a specified period without savings components.